Senators Push for Low-Interest Loans

Sept 23, 2008 /PRNewswire-USNewswire via COMTEX/ -- - Sens. John Kerry, Chairman of the Senate Committee on Small Business and Entrepreneurship, Olympia Snowe (R-Maine), Ranking Member, Tom Harkin (D-Iowa), Committee member, and Chuck Grassley (R-Iowa) sent a letter to the Small Business Administration (SBA) today urging the Administration to review its new standards for credit elsewhere and ensure that the requirements enable current and future disaster victims to obtain assistance. This call comes after the SBA altered its standards to determine which victims would be eligible for low-interest loans, which significantly raised the number of applicants offered loans at a higher rate.

After Katrina, all but 2 percent of applicants received low-interest loans capped at 4 percent to help them rebuild their homes and businesses. But reports from the Midwest floods show that the SBA is determining that a higher percentage of disaster victims are being offered loans at the higher rate. The victims in the Midwest are being offered more expensive loans -- with rates capped at 8 percent and shorter repayment periods -- at a rate fifteen times as great as after Katrina. This is due to changes made by the SBA to the standards for determining if victims are able to receive credit elsewhere. Victims who can receive credit elsewhere are given loans with the higher rates. The SBA must review these standards and ensure that they are not unnecessarily hurting disaster victims and slowing recovery efforts.

"The goal of the SBA in times of disaster should be to facilitate a quick economic recovery," Kerry said. "But with this change, many of the small businesses vital to our economy could close at a time when their continued prosperity is more essential than ever. This standard must be reconsidered so victims will have the resources they need to rebuild their businesses and their lives."

"With small businesses and homeowners struggling to recover from disasters in the Midwest and Gulf Coast, it is imperative that SBA offer loans at reasonable interest rates to those seeking to rebuild," said Senator Snowe. "Entrepreneurs working to restart operations and create jobs, as well as families trying to restore their homes, should be subject to a fair credit elsewhere test that truly determines whether they can access affordable credit in the private market. The SBA must stand ready to quickly provide low-cost credit under the widest possible set of transparent standards when private lenders are unwilling to do so at competitive rates. I urge the SBA to review its current rules and ensure that they do exactly that."

"Across Iowa, businesses and individuals are still reeling from the devastating floods and they need access to these loans to facilitate their recovery," said Harkin. "The mission of the SBA is to assist with economic recovery after a disaster occurs, and the change they made in their lending criteria is counterintuitive to that."

"Iowans are doing all they can to rebuild their lives, homes and businesses. Iowans are hurting and the Small Business Administration's high loan rates are like kicking somebody when their down. People expect help from their government in times of need. Iowans aren't asking for a free ride, just the same treatment and low rates as those given to victims of Hurricane Katrina," Grassley said.

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loans at three percent interest for Chhattisgarh farmers

Thousands of farmers on the occasion of the country’s 62nd Independence Day, Chhattisgarh government Friday declared that it would provide agriculture loans at three percent interest rate. Chhattisgarh farmers will now get loan at just three percent from cooperative societies as against the existing rate of six percent. This is the the lowest interest rate being provided in any state,” Chief Minister Raman Singh said in his Independence Day speech at Police Parade ground here.

Earlier the farmers were able to get just Rs.200-250 crore (Rs.2-2.5 billion) loan annually but last year they received Rs.588 crore (Rs.5.88 billion) as government brought down the interest rate to six percent from 14 percent,” Singh said.

He added that government hoped to provide about Rs.805 crore (Rs.8.05 billion) agriculture loan this financial year due to further slashing of the rates. The chief minister also announced that nearly 4,500 youths recruited as special police officers (SPOs) for anti-Maoist operations will get a pay hike. The SPOs are currently paid Rs.1,500 per month which has been raised to to Rs.2,150 per month.

GHB and SMC unveil 5 year fixed-interest loans

Government Housing Bank (GHB) has joined hands with the Secondary Mortgage Corporation (SMC) to launch their loan-for-housing programs with up to 5 year fixed-interest rates. The move aims to help members of the public with their financial difficulties.

The GHB President, Mr. Khan Prachuabmaoh , disclosed that borrowers who are granted 1 year fixed-interest loan are subjected to pay back their loans at an interest rate of 3.99 while borrowers who choose a 2 year loan will be subjected to a fixed-interest rate of 4.99 %; 5 year loans will have a fixed rate of 6.99 %.

Mr. Khan said after the promotion ends, eligible borrowers are subject to provide minimum retail rate (MRR) of 0.25% to the bank. The maximum loan period is 30 years within the extension of 500 million baht loan.

The loans will be introduced to prospective borrowers in Bangkok and vicinities, beginning from September 1st, 2008. Loaners and mortgage redeemers with a loan of 300,000 to 10 million baht from their existing financial institutions are also eligible. They can have the highest loan of 85% of their existing assets at their existing financial institutions.

Lower interest rates make homes more affordable

Falling interest rates have improved housing affordability in July to its best level since February 2007, the Wizard Home Loans Affordability report shows.

The national median house price was steady in July, but prices are falling in most of the big cities. Tax cuts on October 1 and further falls in interest rates are expected to improve affordability significantly over the rest of 2008 and through the spring when many home sellers put their houses on the market.

This monthly report measures the proportion of a median after tax income needed in each part of New Zealand to service an 80 per cent mortgage on the median house price in that region.

The home loans affordability report shows it took 77.4 per cent of the median take-home pay to service the mortgage on the median house in July, down from 78.3 per cent in June and down from a peak of 83.8 per cent in November last year.

Affordability is now back near the levels it was at in February last year and not far off its levels of 70 per cent seen in the spring of 2006.

Affordability looks set to improve through the rest of 2008 as interest rates fall at the same time as house prices keep falling. Tax cuts due from October 1 are also expected to improve affordability ratios as take-home pay rises slightly for most home-buyers. Nominal wages are also rising relatively fast.

"This coming spring will be the best for home loan affordability in two years," said John Grant of Wizard Home Loans.

"Home buyers are in a much stronger position than they have been for a long time. It is a buyer's market and falling interest rates, rising wages and lower tax rates are all working in favour of home buyers as we head back into summer," Grant said.

However, housing affordability remains much worse than before the housing boom took off in late 2003 and before interest rates rose from under 7 per cent in 2003 to over 9 per cent in 2008. House prices rose 64 per cent between November 2003 and November 2007. In July 2003 the affordability ratio stood at 43.9 per cent.

Central Bank of Samoa’s has moves to drop loan interest rates to ease high cost of living

Samoa’s Central Bank has eased its monetary policy stance by urging commercial banks and government loan institutions to reduce loan interest rates and increase lending for business development in order to bring down the cost of living.

The move is expected to apply for manufacturing, tourism, renewable energy, and agricultural sectors to help with the policy’s objectives of reducing Samoa’s demand for imported food items that have continued to increase in prices.

The Central Bank’s Governor Leasi Papalii Tommy Scanlan, is predicting that the current interest rate of 12-point-7 per cent will be reduced to 12-percent.